U.S. Stock-Index Futures Advance; Citigroup, GM, Alcoa Gain

By Daniela Silberstein

April 2 (Bloomberg) -- U.S. stock futures climbed, indicating the Standard & Poor’s 500 Index may rise for a third day, as the Group of 20 met amid growing speculation the worst of the global recession may be over.

Citigroup Inc. and Bank of America Corp. rallied at least 7.2 percent before a vote on an overhaul of fair-value accounting that may improve profits at banks by more than 20 percent. General Motors Corp., the largest U.S. automaker, advanced 18 percent as car sales fell less than analysts estimated. Alcoa Inc. and ConocoPhillips climbed with higher oil and metal prices.

Futures on the S&P 500 expiring in June added 1.9 percent to 824.3 as of 7:56 a.m. in New York. Dow Jones Industrial Average futures increased 1.7 percent to 7,852 and Nasdaq-100 Index futures gained 2 percent to 1,276. European and Asian shares also rallied.

“Economic data shows that hope has returned and that we haven’t fallen off the cliff and that the stimulus packages have helped as well,” said Rudolf Buxtorf, who manages about $114 million at RBS Coutts Bank in Zurich. “Recent pessimism was exaggerated and there are optimistic signs that this rally will continue over the next few weeks. The G-20 leaders are making an effort to give a positive perspective.”

The G-20 summit convened in London as some reports suggest that the world economy is stabilizing after months of freefall. U.S. stocks yesterday advanced as sales of existing homes unexpectedly increased and a manufacturing gauge topped economists’ estimates, bolstering optimism that the worst of the recession is over.

The European Central Bank cut its benchmark interest rate less than economists forecast, reducing it by a quarter point to 1.25 percent.

S&P 500

The S&P 500 has climbed 20 percent from its 12-year low on March 9 as banks from Citigroup to JPMorgan Chase & Co. said they made money in the first two months of 2009 and Treasury Secretary Timothy Geithner unveiled plans to finance as much as $1 trillion in purchases of financial firms’ distressed assets.

The Financial Accounting Standards Board prepares to hold a final vote on proposed changes to fair-value, also known as mark-to-market, accounting. The changes would allow companies to use “significant judgment” in valuing assets and reduce the amount of writedowns they must take on so-called impaired investments, including mortgage-backed securities.

Citigroup, which has received about $45 billion in government rescue funds, surged 11 percent to $2.97. The stock, which has fallen 80 percent since Oct. 31, is being snapped up by individual investors who sense a bargain, the Wall Street Journal reported, citing online brokerage houses.

Bank of America

Bank of America, the biggest U.S. bank, increased 7.2 percent to $7.56. Wells Fargo & Co., the second-largest home lender, added 5.4 percent to $15.25.

Goldman Sachs Group Inc. rose 2 percent to $112.50. The largest U.S. securities firm to convert to a bank was rated “outperform” by Credit Suisse Group AG, which cited its “strong” position in the market and balance sheet.

GM rose 18 percent to $2.28. U.S. auto sales dropped 37 percent in March, less than analysts estimated, as record incentive spending helped blunt the effect of job losses and low consumer confidence.

Ford Motor Co., the only U.S. automaker not taking federal aid, gained 7.7 percent to $2.95.

Alcoa, the largest U.S. aluminum producer, rallied 4.7 percent to $7.96. Freeport-McMoRan Copper & Gold Inc., the world’s biggest publicly traded copper producer, increased 3.9 percent to $41.25. Copper gained for a third day in London. Aluminum and lead also advanced.

Monsanto

ConocoPhillips, the third-biggest U.S. oil company, added 2.1 percent to $40.65. Crude oil advanced the most in a week on optimism that the world economy is stabilizing, improving the outlook for fuel demand.

Monsanto Co. climbed 6.4 percent to $86.95. The world’s biggest seed producer is due to report earnings today.

Corn climbed on speculation that wet, cool weather may delay crop planting in the U.S. Midwest. Soybeans and wheat also advanced. Cheaper crops threaten to reduce U.S. farm income and curb purchases of Monsanto’s corn seeds.

Agrium Inc., North America’s third-largest fertilizer producer, rose 2 percent to $38.36.

Dow Chemical Co. rallied 5.6 percent to $9.30. The biggest U.S. chemicals maker agreed to sell its Morton Salt unit to K+S AG, Europe’s largest salt maker, for $1.68 billion in cash to help finance the acquisition of Rohm & Haas Co.

A Labor Department report due at 8:30 a.m. in Washington will probably show 650,000 fired workers filed first-time claims for jobless benefits last week as companies strove to stem the drop in profits, according to a Bloomberg survey of economists.

Another report from the Commerce Department at 10 a.m. is expected to show factory orders rose for the first time in seven months, adding to evidence that the worst of the manufacturing decline may have passed. Orders increased 1.5 percent in February, after a 1.9 percent drop the prior month, according to a Bloomberg survey.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.